Soaring costs due to the inability to repair EV batteries may lead to an increase in insurance premiums.
As the number of electric vehicles (EVs) on UK roads continues to grow, the need for a robust battery repair and refurbishment industry becomes increasingly apparent. This is according to Thatcham Research, an organisation owned by motor insurers, which has highlighted the importance of this sector in maintaining parity with Internal Combustion Engine (ICE) vehicles.
Thatcham Research is focusing its efforts on the repair, refurbishment, and remanufacture of EV batteries. The organisation warns that as the number of EVs in the UK increases, it's essential to develop this industry to prevent significant writeoffs due to the high repair costs associated with damaged batteries.
Currently, the number of battery repairs in EVs is low, at just 2% of total EV repairs. However, the cost of a battery increases as the vehicle ages and depreciates, making the high cost of repairing or replacing electric vehicle batteries a concern for the insurance industry. Insurers are concerned that replacing a damaged battery with a new one may put a policy holder in a better position than before their accident, because the car will be worth more with a new battery fitted. A damaged battery in an EV can be worth up to 55% of the value of a new EV.
The debate in the industry about 'betterment' is relevant to these concerns. If a vehicle's value is improved by the repair or replacement of a damaged component, such as a battery, the policy holder may receive a larger payout than they would have received if the vehicle had been written off.
Some electric vehicles with damaged batteries are being written off due to the high repair costs. Dan Harrowell, principal engineer of advanced technologies at Thatcham Research, emphasizes the need for battery repair and refurbishment in the insurance industry.
The development of a battery repair and refurbishment industry is essential as the number of electric vehicles in the UK increases. Refurbishment of electric vehicle batteries to a level equal to the original battery would help solve many challenges faced by the industry.
Leadec, a global industrial service specialist, offers services related to battery repair and circular economy solutions, including insights into lithium-ion battery repairs. This might be relevant to those seeking a cost-efficient method to repair damaged electric vehicle batteries.
The high cost of electric car insurance premiums may also increase due to the high cost of replacing damaged batteries. As electric vehicles age, the risk of increased writeoffs due to the high cost of repairing or replacing electric vehicle batteries becomes a significant concern.
In conclusion, the development of a battery repair and refurbishment industry is crucial for the continued growth and sustainability of the electric vehicle market in the UK. Thatcham Research's focus on this area is a positive step towards addressing the challenges posed by the high cost of battery repair and replacement.
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